Price-fixing accord might help Nintendo Consumers must buy product to be compensated.

April 11, 1991|By John Fairhall | John Fairhall,Evening Sun Staff

WASHINGTON -- A Nintendo Co. spokesman in Japan said today the company wouldn't suffer -- and might benefit -- from a settlement of price-fixing charges that requires Nintendo to compensate consumers.

Nintendo's optimism is based on a key part of the settlement that requires consumers to buy another Nintendo product to benefit.

TTC The settlement announced yesterday requires Nintendo of America Inc., the U.S. arm of the company, to offer a $5 coupon to consumers who may have paid unnecessarily high prices for the company's immensely popular video-game consoles.

As many as 400,000 Maryland consumers will be eligible to receive coupons, which can be used when purchasing Nintendo games, said Maryland Attorney General J. Joseph Curran Jr.

"We don't foresee the settlement having a great effect," a Nintendo company spokesman was quoted as saying.

"And coupons being redeemed will mean products being bought, for which we will be very thankful."

Industry analysts agreed the settlement would have little effect on the company, Reuter reported.

"Next to nothing," said UBS Phillips and Drew analyst Nizam Hamid.

L "The amount is minimal compared to the company's cash pile."

Curran and other officials defended the coupon program as the most practical way to provide compensation.

They said consumers who bought consoles probably would be in the market anyway for more games and, hence, would save.

And they said the alternative, a direct payment by check, would have resulted in payments of less than $5 because of the costs involved.

- See NINTENDO, F10, Col. 3 NINTENDO, From F14 New York Attorney General Robert Abrams said Nintendo is paying a heavy price" monetarily and from the "stigma of law-breaking."

Curran emphasized the importance of the settlement in getting Nintendo, the video game industry giant, to stop its alleged practices.

And other companies will think twice before doing the same thing, he said.

From June 1988 through December 1990, Nintendo allegedly forced retailers to sell the game-playing console for the suggested retail price of $99.95.

Retailers who sought to sell it for less were threatened with a supply

cutoff, state and federal officials said.

The investigation was led by the Maryland and New York attorneys general in cooperation with the FTC.

Nintendo may not be off the hook yet.

State and federal officials strongly hinted they are now investigating monopoly issues related to the console, which can accept cartridges made only by Nintendo or its licensees.

Nintendo denied violating antitrust laws, but agreed to send $5 game coupons to consumers who bought consoles between June 1, 1988, and Dec. 31, 1990.

A statement issued by Nintendo said "the company opted to maintain the goodwill of its loyal consumers

rather than engage in lengthy court proceedings."

Nintendo will redeem up to $25 million in coupons and pay nearly $5 million in cash to Maryland, New York, the District of Columbia and other states that agree to the settlement.

Of the $5 million, Maryland will receive about $160,000, earmarked for state government's general fund, Curran and his staff said.

It may be several months before consumers begin receiving coupons.

To find out whether the company has their names and addresses, consumers may call Nintendo's regular toll-free number, 1-800-255-3700. To establish their eligibility, they must report the serial number of their console.